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Chimera Investment Corporation Sponsors Four Residential Mortgage Loan Securitizations and Retires Loan and Related Warrants

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Chimera Investment Corporation (NYSE:CIM) announced two significant securitizations on March 25, 2021, totaling approximately $1.74 billion. The CIM 2021-R2 securitization is valued at $1.5 billion, while CIM 2021-NR2 is approximately $240.4 million. Both securitizations involved seasoned residential mortgage loans, with CIM retaining subordinate interests worth $224.6 million and $60.1 million respectively. The weighted average cost of debt for these securitizations is notably lower at 2.24%, compared to 4.22% for prior ones. Additionally, Chimera retired a $400 million loan, further strengthening its financial position.

Positive
  • CIM 2021-R2 securitization total of $1.5 billion and CIM 2021-NR2 of approximately $240.4 million reflect strong market activity.
  • CIM retained subordinate interests totaling $224.6 million and $60.1 million, indicating confidence in their investments.
  • Expected weighted average cost of debt at 2.24% is significantly lower than the 4.22% from prior securitizations, reducing future interest expenses.
  • Paid off a $400 million loan, improving balance sheet strength.
Negative
  • None.

On March 25, 2021, Chimera Investment Corporation (NYSE:CIM) sponsored CIM 2021-R2, a $1.5 billion securitization of seasoned reperforming residential mortgage loans, and CIM 2021-NR2, a $240.4 million securitization of seasoned non-REMIC eligible residential mortgage loans. The mortgage loans for both securitizations were from the call and collapse of Chimera’s CIM 2017-3, CIM 2017-4, and CIM 2018-NR1 securitizations (the “Prior Securitizations”).

Securities issued by CIM 2021-R2, with an aggregate balance of approximately $1.3 billion, were sold in a private placement to institutional investors. These senior securities represented approximately 85% of the capital structure. Chimera retained subordinate interests in securities with an aggregate balance of approximately $224.6 million and certain interest-only securities. Chimera also retained an option to call the securitized mortgage loans at any time beginning in March 2025.

Securities issued by CIM 2021-NR2, with an aggregate balance of approximately $180.3 million, were sold in a private placement to institutional investors. These senior securities represented approximately 75% of the capital structure. Chimera retained subordinate interests in securities with an aggregate balance of approximately $60.1 million. Chimera also retained an option to call the securitized mortgage loans at any time beginning in March 2022.

Chimera’s expected weighted average cost of debt of these two securitizations is 2.24% compared to a weighted cost of debt of 4.22% for the Prior Securitizations.

In addition, Chimera sponsored two prime jumbo securitizations, $404.8 million of CIM 2021-J1 and $479.1 million of CIM 2021-J2, in March. Both securitizations are rated by Moody’s and Fitch.

Lastly, on March 26, 2021, Chimera paid off a $400 million loan secured by certain mortgage-backed securities and subsequently retired for cash all associated warrants at a discount to a trailing 30-day average price of its common stock.

Disclaimer

This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Actual results may differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “target,” “assume,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believe,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Chimera does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Additional information concerning these and other risk factors is contained in Chimera’s most recent filings with the Securities and Exchange Commission (SEC). All subsequent written and oral forward-looking statements concerning Chimera or matters attributable to Chimera or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.

About Chimera Investment Corporation

We are a publicly traded REIT that is primarily engaged in the business of investing, on a leveraged basis, in a diversified portfolio of real estate assets, including mortgage loans, Non-Agency RMBS, Agency CMBS, Agency RMBS, and other real estate assets.

Please visit www.chimerareit.com for additional information about the Company.

FAQ

What are the details of Chimera's new securitizations as of March 2021?

Chimera Investment Corporation sponsored the CIM 2021-R2, a $1.5 billion securitization, and CIM 2021-NR2, a $240.4 million securitization, both involving seasoned residential mortgage loans.

What is the expected cost of debt for Chimera's new securitizations?

The expected weighted average cost of debt for the new securitizations is 2.24%, compared to 4.22% for the prior securitizations.

How much did Chimera retain in subordinate interests from its securitizations?

Chimera retained subordinate interests of approximately $224.6 million from CIM 2021-R2 and $60.1 million from CIM 2021-NR2.

What actions did Chimera take regarding its $400 million loan?

Chimera paid off a $400 million loan secured by certain mortgage-backed securities and retired associated warrants at a discount.

Chimera Investment Corp.

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REIT - Mortgage
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United States of America
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